Unavoidable Rise of Bitcoin Stocks!

Popular cryptocurrency Bitcoin (CRYPTO: BTC) briefly hit an all-time high of $ 48,226.25 on Tuesday around 2:00 am.

The share of technology company MicroStrategy (NASDAQ: MSTR), which recently converted all the money not needed for daily operations into Bitcoin, gained 23 percent as of 2:30 pm. Bitcoin mining shares also rose on Tuesday. Marathon Patent Group (NASDAQ: MARA) rose 22 percent, and Riot Blockchain (NASDAQ: RIOT) rose 26 percent. Bit Digital (NASDAQ: BTBT), on the other hand, showed a modest increase of 4 percent, but traded at +17 percent from current early in the session.

Bitcoin's journey to high levels was ignited by the news that Tesla has allocated $ 1.5 billion from its balance sheet to buy and hold Bitcoin.

CEO Elon Musk is an icon among retail investors. Musk's transition to the cryptocurrency space sparked demand for Bitcoin. Given that Tesla is now an S&P 500 company, this move could have a ripple effect, causing leading businesses to convert at least part of their balance sheets to Bitcoin. These news have relatively little impact on Tesla's stock. But the rationale for this is that companies investing in Bitcoin invest a small part of their overall value into the leading crypto. The same cannot be said for MicroStrategy. MicroStrategy stock has made huge gains, up over 500 percent in the past three months. The company increased its value by billions for a medium stock on paper. MicroStrategy held 71,079 Bitcoins with an average price of $ 16,109 as of February 2. The company has spent over $ 1.1 billion, which is a very large amount. However, the value of the company's assets has risen to over $ 3.4 billion in the current days when it was $ 48,000 per Bitcoin token. That means $ 2.3 billion in earnings!

Broadly speaking, imagine that the total assets of the company are not even $ 1 billion before the purchase of Bitcoin.

Marathon, Riot Blockchain, and Bit Digital are all bitcoin mines. Investors in these companies must keep up with the specific computing power of each. Every company has a different breakeven price when it comes to new token mining. But if Bitcoin continues to rise as it is, these companies could achieve record profits in 2021. As Bitcoin's price rises, the chances of making even higher profits explain why investors are so excited about these stocks in general and why these companies are gaining so much value today. While all three stocks appear optimistically to have expensive valuations, this has not stopped them from generously rewarding their investors in recent months.   Unavoidable Rise of Bitcoin Stocks! Source: https://www.fool.com/ You may also be interested in this: What to Expect From Walt Disney (DIS) Earnings Reports?